Should You Work to Improve Your Credit Score?

You may have “improve credit score” as one of the items on your financial to-do list for the year, but that’s not always a goal worth actively pursuing.

For example, if your score is already very high, a few points of improvement won’t provide any benefit to you financially.

Likewise, if you’re about to do something that will cause your score to nosedive (like having your house go into foreclosure), there are probably more important things to focus on financially.

When does it pay to improve your credit score?

Actively working to improve your FICO score is most beneficial if you have either a very bad score or are right on the borderline of having excellent credit.

In both of those cases, bringing up your score will help you to obtain better interest rates if you choose to borrow money. It can also reduce the cost of your insurance if your insurance company uses the score to calculate your rate, which more companies are doing.


If you do decide that improving your score is a goal worth pursuing, be wary of organizations that promise to help “repair” your credit to bring up your score — especially if they promise to remove negative items for a fee. (Legitimate negative items stay on your report until they age off, and you can remove items that are incorrect yourself without paying a fee.)

Instead, focus on doing things like paying your debts on time or early, keeping your oldest credit line open, not having too many lines of credit or too much credit open, not using the vast majority of your available credit, etc.

Generally, the easiest way to improve your score is to be financially responsible. Focus on that, and your credit score will take care of itself.


  • I have three credit cards. One is just a small $200 credit limit that I got 6 years ago to help rebuild credit after I moved back to the states from Europe. I have two other cards, one with a $7k limit, and the other with a $1K limit. Neither big card has an annual fee, or monthly maintenance fee if i have no balance. The $200 limit card charges me $7 each month regardless of whether or not I have a balance, and a $48 annual fee. I want to cancel this card… will it hurt my credit score to cancel?

    • Yes, it will probably hurt your score a little bit, short term. It’ll be a little bit larger hit as well if it’s also your oldest credit line. BUT, if it were me I’d absolutely cancel it unless I were about to do something major like buy a house. It wouldn’t be worth the annual cost to keep it around. (As a side note, I canceled ALL of my credit cards back when I got a divorce, and it didn’t hurt anything for me long-term.)

    • Another option to canceling your card is to ask the card company if they have a better card for you. They may very well have a card with no monthly or annual fees.

  • You know what has been some of the best ways to improve my credit score? Paying off my balances and paying my bills on time.

    Of course there are times when your credit score isn’t of utmost importance, but I think it’s a nice by-product that by paying on time and paying off your debt you can have a great score.

    • Yeah, I’ve found the same thing to be true. Just focusing on what’s good for you financially, long-term, will pretty much take care of your credit score.